IfG report lauds Treasury’s Financial Management Reform programme

Written by Jim Dunton on 9 December 2016 in News
News

But think tank warns that ministers could jeopardise its success by scaling back resourcing or attempting to widen its scope too much

 

The Institute for Government has saluted the success of a Treasury initiative designed to put finance at the heart of decision-making across Whitehall, but cautioned that it is still a work in progress.

The Financial Management Reform programme is a cross-departmental initiative that sprang out of 2013’s Review of Financial Management in Government. It covers value mapping; costing projects; career development; professional development, and streamlining the collection of management information.

A new report by the IfG and the Chartered Institute of Management Accountants said the programme had benefited from a clarity of purpose and a high-level ambition that resonated with staff.


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It said the combination of the Treasury’s roles of head of the finance profession and director general for public spending had helped focus leadership and also demonstrated “the seriousness” attached to leading the finance function. 

However the report warns that while the FMR programme has progressed through its preparation and take-off phases, and had already been “refreshed” once, there was a risk that the after-effects of June’s EU referendum result and the appointment of a new chancellor could affect its future.

It said the programme was at “a transition point” where decisions around the level of ambition and resourcing would dictate whether the reforms maintained momentum, while at the same time the programme could also be under threat by having its scope broadened.

“When a piece of governance seems to work, and there is a capable team driving delivery of a reform, the temptation is to give that reform additional challenges that are not working elsewhere,” the report authors cautioned. 

“We have already seen this with finance which, since spring 2016, shares responsibility for sorting out shared services with the Cabinet Office,” they said. 

“There is a long legacy of failure with shared services in government. Widening the FMR’s scope at a time when the changing context should be forcing it to focus is a risk.”

"Significant progress"

Report co-author IfG deputy director Julian McCrae said the FMR programme’s success had been in “stark contrast” to many cross-departmental reforms, which failed to make any tangible progress.

But he said there was still a long way to go, and that the Treasury and chancellor Philip Hammond should recognise that the reforms targeted by the 2013 review required a 15-year vision.  

“Overall, the financial reforms have delivered significant progress in a relatively short period of time,” he said. 

“They have created a stronger sense of community among finance leaders, established new processes for understanding spending within and across departments, improved professional development for finance staff and enhanced the coherence of financial information within departments and flowing to the centre of government.

“The Institute has long highlighted the importance of, and encouraged sustained investment in, areas like financial management. 

“Whitehall needs to build on the progress to date and avoid being distracted by some shiny, new initiative.”

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